Cambodia’s central bank has taken decisive action against Huione Group, a financial services conglomerate, by ordering the shutdown of its payment services division, Huione Pay. This move comes amid a backdrop of escalating controversies and intensified scrutiny from regulatory bodies globally. The National Bank of Cambodia (NBC) announced the revocation of Huione Pay’s operating license just days after a considerable bank run forced the company to suspend withdrawals of customer deposits.
The urgency for such a measure arises from allegations posed by the U.S. Treasury Department, which accuses Huione Group of facilitating money movement for various criminal organizations, most notably Chinese gangs involved in elaborate scam operations in Southeast Asia, as well as North Korean hackers engaged in cryptocurrency theft. A comprehensive New York Times investigation from earlier this year revealed that Huione Group has purportedly been instrumental in money laundering activities within the infamous Golden Triangle region, encompassing Thailand, Laos, and Myanmar.
The regulatory landscape for Huione has become increasingly hostile, particularly following the U.S. government’s designation of the group as a “primary money-laundering concern.” This designation effectively severs the company from the American financial system, with a concerted effort underway in collaboration with U.K. authorities to dismantle the criminal networks reliant on Huione’s services. In a show of escalating pressure, Cambodian regulators have also imposed various penalties, while South Korea has enacted its own sanctions against the group, indicating a wide-reaching international effort to combat the issues stemming from Huione’s operations.
Investigations led by the International Consortium of Investigative Journalists (ICIJ) have revealed that Huione Group has channeled significant amounts of cryptocurrency—hundreds of millions of dollars—through major exchanges such as Binance and OKX, despite the group having already been flagged as a money laundering threat. Alarmingly, both exchanges have previously faced legal consequences for violating U.S. anti-money laundering regulations.
ICIJ’s outreach to Huione Group for comments via two email addresses yielded no response, as both accounts have since been disabled. In contrast, Binance assured that it actively collaborates with global law enforcement agencies to identify and address suspicious transactions. OKX stated its commitment to compliance, revealing that it had already implemented measures to restrict accounts linked to Huione prior to the latter’s designation as a money laundering entity.
The National Bank of Cambodia has announced the liquidation of Huione Pay’s assets, emphasizing that the ongoing circulation of cryptocurrency in relation to Huione presents potential risks to both Cambodia’s banking system and public welfare. In light of Huione Pay’s abrupt cessation of operations, the NBC has instructed customers affected by the frozen withdrawals to visit its office in Phnom Penh to reclaim their funds.
Local reports indicate that signage at Huione’s office includes claims that customers can invest in “high-yield financial products” with a promise to recover their full principal over an 18-month period. This notice attributes the current issues to “recent changes in the external market environment,” describing the payment delays as an essential response to the substantial movement of funds.
This developing situation highlights ongoing challenges in the regulation of cryptocurrency and financial services amidst increasing criminal activity linked to such industries.
